>> production assistance for "inside washington" was provided by allbritton communications and "politico," reporting on the legislative, executive, and political arena. >> rather than and devise a plan of their own, liberals in congress simply want to raise taxes. >> what a sham, what a scam. >> this week on "inside washington," the lively debate over the debt ceiling continues. but the clock is ticking. how about amending the constitution to require a balanced budget? >> it is not the air, it is a real plan. we are the only people who have a plan. >> the gang of six has a plan, to. is anybody listening? the woman who dreamed up the consumer financial protection agency is passed up for the job

it is a senate run in elizabeth warren of's future? phone hackingh scandal -- media mogul rupert murdoch called before a committee of british parliament. >> do you have a responsibility? >> no. captioned by the national captioning institute --www.ncicap.org-- >> here is the deal -- as we require this program, we don't know how the debt ceiling business is going to play out over the weekend, but we have to put a program on the air, so here goes. president obama said he hopes to elevate the tone of her political discourse in washington. >> the way we run campaigns, the demonization of what the other side, i think that is broken

down some of the trust and washington. >> anyone who witnessed his reckless spending ahabits the past 2.5 years or sat across the negotiating table the past few weeks could be forgiven for being skeptical of his recent attempts to come across as a fiscal moderate. >> that is senate minority leader mitch mcconnell, who has made no secret of his hope that president obama is a one-term president, but as mark said last week, at least he is honest about it. some democrats are angry at the president and his people, some republicans want boehner to hold the line. how is this going to play out, charles? >> if i knew i would be rich. [laughter] it seems that the most likely outcome -- is probably impossible to get a grand bargain. the democrats are not going to give in to real structural

changes in entitlements. you not going to get republicans to have, at least right now, increases in taxes. but will likely happen is we will end up at the last minute is the mcconnell plan, a punt, not in a democracy. people decided next auctions -- if auctions -- decide in the next election if they want starkly different visions of how the country is run. >> colby? >> it is a real political fight, because every time the president moves to the mcconnell plan to increase the debt ceiling, he will be hammered for doing so. we will see a prolongation of this political fight we have seen so far. it is not going to be pleasant. >> nina? >> i feel like i'm watching "deal or no deal," but i am inclined to agree with charles.

at the moment, anyway, it seems like the republican base, the freshman class, will not allow boehner to go with the gang of six plan, or at least a vote on the gang of six plan, and the democrats -- obama can only do cuts, without any revenue enhancement or taxes. that means one thing, mcconnell . >> mark? >> i do not disagree with charles. >> then i retract. [laughter] >> i am hoping to in paris charles by agreeing with him. at a moment of this magnitude energy, you have to get everyone a sense of ownership. right now the only ones who have a sense of ownership are john boehner and eric cantor, the republican leaders to come to their credit, have allocated the republican house to the he position of deliberations with barack obama, the president of the united states.

democrats and the senate and democratic house members feel excluded it and are angry. that is a problem for any grand bargain. >> i do think the republicans is a missed opportunity. they wanted to use the debt limit to get something. if you go with mcconnell, it is essentially a punt. what they've lost in advance by not agreeing to a single plan and having the president to have to put real numbers and cuts on the table, which he has not done -- what republicans in the house could do -- i talked about this in my column -- half a trillion dollars in cuts and half a trillion dollars raising the debt ceiling, which gives you have at year where you can negotiate and deal. if that were passed, it would be very hard for the president to explain why he would put us into default. charles,agree with

but i will defer to the tenement -- the gentleman -- >> i agree with part of the disagreement. the taxes side -- unless the deal will include some increase in revenues, there will be no deal. there is no way the senate are president will accept the package from the rebel against -- from the republicans without any revenue increases. i leave the rest of this to mark. take it away, mark. >> to the best of our knowledge, as we may hear today, the pending deal is cut 7 $3 trillion, -- cuts of at $3 trillion, to be followed by tax increases in a later date, a player to be named later. this is a total reversal of what democrats have done in the past, which is we will get our deal right now and in the budget cuts later, which somehow they

never get around to, and it has been to their advantage. this is not in the congressional democrats' interest, and there is a serious shortage of trussed up their. why we are making the cuts now with the prospect and promise of increases later, with a republican congress opposed to it, i think it's pretty dubious. >> mr. shields yields the balance of his time to the gentleman from npr -- gentlewoman from npr. [laughter] >> i think mr. shields is right. you need the democrats to get a deal in the senate. there are 80 republicans in the house who say they will not sign anything that has any tax in eight. the democrats -- you really

have to have a combination of taxes and cuts in order to get it passed either body and you have to move to the floor and pass a filibuster in the senate. >>, cut, cap and balance -- tea party folks love the idea of a constitutional amendment at what point does reality come to these people, because we know it is not going to happen? >> i love how you objectively pose the question. this is a fair and balanced program -- >> we do our best. we don't have the resources of were rupert murdoch -- -- [laughter] >> i think if this were a less heated environment, cutting and

capping is a good idea. the budget and then it is a problem. i have a problem with it. -- the balanced budget amendment is a problem. i have a problem with it. but joe biden, who is a democrat, supported one in the 1990's. it depends on how you craft it and make exceptions. if you are in wartime, you don't want to have those strictures. it is not a good idea to introduce at the last minute. >> the cap is 18.5% of reagan's eight budgets averaged 22% of the revenues being gdp of the country. the gipper would be drummed out of the party -- >> 18.5 is the average of the postwar era -- >> it is absolutely not. you are wrong, wrong, wrong. >> i blame both parties for the stalemate. >> all the people who are responsible for this are elected to do a job.

if i did my job like that, i would be fired. >> citizens interviewed by cnn in response to the endless debate on the debt ceiling. 61% of the american people believe that if the debt ceiling is not raised, the nation will be in more hot water than it is now. a 52% believed the president has acted responsibly, 33% believed republicans acted responsibl y. who benefits the least? >> washington. there is a slight advantage to the president when it is stacked up to republicans in congress, but there is a growing sense of disgust and disappointment on the political process, parties in general. who cares more about ordinary americans and average families and who is more willing to compromise, the president has decided advantage over republicans. >> what about the gang of six? is anybody listening to these

senators? >> initially there was a response in the senate, where the senators stepped up and said they white to the idea -- they'd like to the idea. but then we started to hear from interest groups, labor groups, health groups, saying that this was going to be hard on senior citizens and devastating to people who rely on medicare. you have anger in the house with the idea. i think thursday was probably the high point or the low point of this whole debate. anting overgh rent the grand bargain that may be developed, taking phone calls from boehner trying to assure him there is no deal, getting text messages from cantor. you have the democrats on the senate side apoplectic about

video. >> -- about the deal. >> every time you look at the television screen, there are elderly people in commercials warning people, don't mess with medicare, we vote -- >> let me point out that there is no doubt that the gang of six recommendations are painful, but they are not nearly as painful as the alternative that is being proposed by republicans. if we end up with a severe, more severe cuts the backlash from voters will be, i think, just enormous, and just remember this -- whatever congress does today, it can and do it tomorrow. this is not a constitutional amendment. if there is a backlash, it could wreak havoc by making more fiscal irresponsibility. >> charles, how is this playing with independents, which is where the action is? >> there is a lot in the interim which all of us inside

washington are affected by. in the end, independents are swayed by how this is resolved, not by what happened in the three weeks in the run-up. it is most likely to be a punt, probably as it should be. obama has a vision of america. he introduced new entitlement, health care. he had an increase in discretionary spending of 24% in two years. that is massive. he has a vision of america that is different from the republican idea of smaller government, reducing entitlements, living within a budget, because 10% of gdp is out of it -- >> we wouldn't 8 -- >> it is utterly astronomical. a punt -- we lose a year and half and solving our problems, and yet it is such an issue that has to be decided by having a divided government, if the republicans succeed -- >> i would offer this pithy

thought -- the year and half we're talking about pulling out of the worst recession we have had since the great oppression -- great depression took a lot of time and energy and resources to do that. it is such an anti-obama mood it that it is difficult to get anything done. for example, listening to rush limbaugh, the biggest concern is that republicans should do nothing to help obama. there is no reference to saving the country, avoiding disaster with the debt ceiling. it was a question of helping or hurting obama. >> just to charles, the republicans' last-minute battlefield conversion to fiscal sanity was not and a display in the last 20 years of republican presidents, during which we had on balanced budgets in every

single one. the only balanced budgets we had work with a fellow from arkansas, remember him? bill clinton. >> there is this problem of the recession and how much cutting you want to do during the recession and what that does defeat rea recession. >> let's talk about republican presidential politics. what are the polls telling us? >> mitt romney has had is an enthusiastic and be all the way through, but said in a place this change -- mitt romney had this unenthusiastic lead all the way through, but second place has changed all the time. it was donald trump, then herman cain, pizza fellow, and now it is michele bachmann. she had an interesting week. she handled it charges of the migraine headaches a very well, very responsive. she never played the victim's car. she never attacked the press for raising this. she showed herself to be quite adept on the first time they

went negative on her. >> they are coming after her husband because of this clinic he runs where he claims he can convince a people to become straight -- convince gay people to become straight. >> i will put a cautionary note on how she handled it. >> ok. >> for those of you who remember a long time ago when paul tsongas did not come clean about his medical condition, and as a person who has had a few migraines in my life, i certainly don't think i could be president. but if she is having those and they are not controlled and it happens while she is on a the stump, it could be very debilitating to her candidacy. i'm not saying it will, it could be. >> pawlenty tried to get out on this -- >> there was a statement from

the capitol hill physician saying this was a very manageable. >> capitol hill physician is all i can say -- >> what are you suggesting? >> exactly what you think. >> paul tsongas had cancer. there was a big difference between cancer and migraines. if we are going to hold up a standard that if you have a headache that knocks you out for an hour or two, you cannot be president, fdr and kennedy, who had addison's disease, and eisenhower, who had a bad heart, would never have been president of the united states. i am not sure that is the position any of us would want to take. i think her answer was good, i think based on the evidence -- is their behavioral evidence of this woman not being able -- >> just be a cautionary. >> well, cautionary is fine -- >> i don't know the capitol

hill physicians but i don't think it is fair to imply that somehow this is a less qualified individual. >> i'm not saying that. >> what about rick perry? >> rick . looks more and more like he is going to come into the race. -- rick perry looks more and more like he is going to come into the race. mike huckabee, a conservative finalist in 2008 against john mccain, has taken a shot at him, saying he will be the champion of traditional values and high morals, and then why did he indoors and back to rudy giuliani -- endorse and back rudy giuliani, a pro-gay rights politician? >> i am not sure that supporting giuliani or the gay issue will have any effect whatsoever on perry.

he has a lot of money and support. he is not even in the race, and the fox news opinion poll on thursday showed mitt romney at 17 n., i believe, perry attw13. >> there is a letter shakiness with him. >> i think it will end up with perry and romney. >> nobody is responsible to the american consumer. nobody is looking for american families. >> harvard law professor elizabeth warren with abc's jake tapper. she was a prime mover in the wall street reform and consumer protection act. wall street does not like this, charles. >> how was it working out, with

9.2% unemployment? the regulations that i get to be written on this -- that are yet to be written on this take years and years and introduce nothing but uncertainty in the markets, and add to that, obamacare, unbelievable uncertainty. nobody knows what the rates are going to be, who is going to be injured and not insured, and you are surprised businesses are not hiring? >> the consumer protection agency is not responsible for that -- >> dodd-frank -- >> could i finish? look at your credit card bill. for the first time you can -- >> i'd rather not. >> see what it costs you if you don't pay it off. this agency is to make the buying public able to see what the costs are -- and to break are -- make a market judgment as

to what kind of mortgage or credit-card we want. it seems that those are all things that are eminently sensible. >> elizabeth warren's ardaman is that consumers are protected by in toys for their children but not financial instruments. >> we saw this play out during the carter administration when they tried to get a consumer protection agency through. esther peterson survive, but the agency did not. in this case, the agency to rise but elizabeth warren and doesn't the question is not only what is next for the agency, but what is next for elizabeth warren? that is one of the more interesting aspects of the story. >> she was passed over for the top job by a former ohio attorney general richard cordray. >> what could she not get confirmed? -- why would she passed over? >> she cannot get confirmed. >> there is talk of her running out for the senate in massachusetts against scott

brown. >> this is a part time for her to announce that she is pretty happy to mention it on this show. scott brown is formidable. i've been talking to a number of democrats who think there is going to be an uphill race against him. but let's make one thing clear about richard cordray, who is an outstanding attorney general of ohio. it is not just elizabeth warren and they are trying to sink, the republicans. shelby is going to filibuster hamid they don't like this agency. >> they never have. and they don't like consumers very much. >> they don't like the revenue stream this agency has. >> that's right, because it gives them autonomy that congress -- >> let me just explain to the viewers out there that this segment is three massachusetts

democrats of the elizabeth warren campaign for senate coming to a polling place near you. "the new yorkread times"? endorsement.k's >> she would make a fabulous candidate, but so is brown -- >> i feel like a sign language interpreter on the show. i have to explain what is really happening. >> this replaced the sarah palin segment of the show. [laughter] >> this is the most humble day of my life. >> these actions do not live up to the standards our company spires -- aspires to. >> rupert murdoch and son james before british parliament. both apologized profusely for the phone hacking scandal that has engulfed the company did next day, their stock went up. what did you take away from this, colby?

>> if i were a witness in a hostile situation, i would love to have wendi behind me. [laughter] >> murdoch's wife. >> this snow sam alito -- this snow sam alito'-- this is no sam alito's wife weeping. >> first of all, james has been contradicted by top executives saying that he knew far more and he misled parliament. i am a little dubious about what the fbi will find. apparently they are investigating possible computer hacking. i have to say, every time i think the scandal cannot get worse, it does. >> mark? >> this is the imelda marcos of scandals. there will continue to be shoes to drop. this man was humble, modest,

self-effacing. this is the desperate, the guy in charge, -- and for all -- this is the despot, the guy in charge, and control. i pledge to you, parliament, i will find out who is running the company did this is serious and getting more serious by the moment. when you get the superintendent of scotland yard resigning, the prime minister of great britain going to the well to just basically defend himself and his contacts with him, which were more than any other institution or individual and the country, this is a serious, serious story and reality. >> charles? >> the murdochs were on the defensive and had a lot to defend. i thought their presentation was rather good. i think murdoch -- he runs a company that is unbelievably diverse, and this one paper is a relatively small part of it. i am not surprised, and it is

plausible that the committee had a sort of accepted his protestations that he was not aware of all of these shenanigans. what i found really interesting, however, was the way the committee conducted itself. hear, when you have hearings, like the polley north hearings, the inquisitors are on a podium looking down on the defendant there, it was like a british parliament cafeteria meeting. a lot more pointed, less pompous, more effective. >> good review. last word. see you next week. for a transcript of this broadcast, log on to insidewashington.tv.